2017 LABOR LAW REVIEW | FINALS
1.) II. Recruitment and Placement
A. Rocket Corporation is a domestic corporation registered with the
SEC, with 30% of its authorized capital stock owned by foreigners and 70% of its
authorized capital stock owned by Filipinos. Is Rocket Corporation allowed to
engage in the recruitment and placement of workers, locally and overseas?
Briefly state the basis for your answer. (2015 Bar Question)
B. When does the recruitment of workers become an act of economic
sabotage? (2015 Bar Question)
SUGGESTED ANSWER:
A. No. Article 27 of the Labor Code mandates that pertinently, for a
Corporation to validly engage in recruitment and placement of workers, locally and
overseas, at least seventy-five percent (75%) of its authorized and voting capital
stock must be owned and controlled by Filipino citizens. Since only 70% of its
authorized capital stock is owned by Filipinos, it consequently cannot validly
engage in recruitment and placement of workers, locally and overseas.
B. Under Section 6(m) of RA 8042, illegal recruitment is considered
economic sabotage if it is committed by a syndicate or is large scale in scope. It is
syndicated illegal recruitment if the illegal recruitment is carried out by three (3) or
more conspirators; and it is large scale in scope when it is committed against three
(3) more persons, individually or as a group.
2.) Pre-termination of contract of migrant worker
Q: Peter worked for a Norwegian cargo vessel. He worked as a deckhand,
whose primary duty was to assist in cleaning the ship. He signed a five-year
contract starting in 2009. In 2011, Peters employers began treating him
differently. He was often maltreated and his salary was not released on time.
These were frequently protested to by Peter. Apparently exasperated by his
frequent protestations, Peters employer, a once top official in China, suddenly
told him that his services would be terminated as soon as the vessel arrived at
the next port, in Indonesia. Peter had enough money to go back home, and
immediately upon arriving, he filed a money claim with the NLRC against his
former employers local agent. Will Peters case prosper? (2012 Bar Question)
a. Yes, he is entitled to full reimbursement of his placement fee, with
interest at 12% per annum, plus salary for the unexpired portion of
his employment contract or for three (3) months for every year of
the unexpired portion, whichever is higher.
b. Yes, he is entitled to full reimbursement of his placement fee, with
interest at 12% per annum, plus his salary for the unexpired
portion of his employment contract for three (3) months for every
year of the unexpired portion, whichever is less;
c. Yes, he is entitled to his salaries for the unexpired portion of his
employment contract, plus full reimbursement of his placement
fee with interest at 12% per annum;
d. Yes, he is entitled to his salaries for three (3) months for every year
of the unexpired portion of his unemployment contract, plus full
reimbursement of his placement fee with interest at 12% per
annum.
SUGGESTED ANSWER:
2017 LABOR LAW REVIEW | FINALS
a) Yes, he is entitled to his salaries for the unexpired portion of his
employment contract, plus full reimbursement of his placement
fee with interest at 12% per annum [Serrano vs. Gallant Maritime,
G.R. No. 167614, March 24, 2009]
3.) Q: LKG Garments Inc. makes baby clothes for export. As part of its measures
to meet its orders, LKG requires its employees to work beyond eight (8) hours
everyday, from Monday to Saturday. It pays its employees an additional 35% of
their regular hourly wage for work rendered in excess of eight (8) hours per day.
Because of additional orders, LKG now requires two (2) shifts of workers with
both shifts working beyond eight (8) hours but only up to a maximum of four (4)
hours. Carding is an employee who used to render up to six (6) hours of overtime
work before the change in schedule. He complains that the change adversely
affected him because now he can only earn up to a maximum of four (4) hours
worth of overtime pay. Does Carding have a cause of action against the
company? (2015 Bar Question)
SUGGESTED ANSWER:
NO. A change in work schedule is a management prerogative of LKG. Thus,
Carding has no cause of action against LKG if, as a result of its change to two (2)
shifts, he now can only expect a maximum of four (4) hours overtime work.
Besides, Art. 97 of the Labor Code does not guarantee Carding a certain number of
hours of overtime work. In Manila Jockey Employees Union v. Manila Jockey Club
(517 SCRA 707), the Supreme Court held that the basis of overtime claim is an
employees having been permitted to work. Otherwise, as in this case, such is
not demandable.
4.) Q: Corporation X is owned by Ls family. L is the President. M, Ls wife,
occasionally gives loans to employees of Corporation X. It was customary that
loan payments were paid to M by directly deducting from the employees
monthly salary. Is this practice of directly deducting payments of debts from the
employees wages allowed? (2012 Bar Question)
a) Yes, because where the employee is indebted to the employer, it is
sanctioned by the law on compensation under Article 1706 of the
Civil Code;
b) Yes, because it has already become customary such that no express
authorization is required;
c) No, because an employees payment of obligation to a third person
is deductible from the employees wages if the deduction is
authorized in writing;
d) No, because Article 116 of the Labor Code absolutely prohibits the
withholding of wages and kickbacks. Article 116 provides for no
exception.
SUGGESTED ANSWER:
d) No, because Article 116 of the Labor Code absolutely prohibits the
withholding of wages and kickbacks. Article 116 provides for no
exception.
SUGGESTED ALTERNATIVE ANSWER:
a) Yes.sanctioned by the law on company under Art. 1706
5.) Q: Jose and Erica, former sweethearts, both worked as sales representatives
2017 LABOR LAW REVIEW | FINALS

for Magna, a multinational firm engaged in the manufacture and sale of and
pharmaceutical products. Although the couple had already broken off their 2. connected with the work of the employee.
relationship, Jose continued to have special feelings for Erica.

One afternoon, Jose chanced upon Erica riding in the car of Paolo, a co-employee
and Erica's ardent suitor; the two were on their way back to the office from a
sales call on Silver Drug, a major drug retailer. In a fit of extreme jealousy, Jose
rammed Paolo's car, causing severe injuries to Paolo and Erica. Jose's flare up also
caused heavy damage to the two company-owned cars they were driving.
SUGGESTED ALTERNATIVE ANSWER:
Article 282(e) of the Labor Code talks of other analogous causes or those which are
susceptible of comparison to another in general or in specific detail as a cause for
termination of employment.

(A) As lawyer for Magna, advise the company on whether just and valid
grounds exist to dismiss Jose. (2013 Bar Questions)
SUGGESTED ANSWER:
Jose can be dismissed for serious misconduct, violation of company rules and
regulations, and commission of a crime against the employers representatives.
In one case, the Court considered theft committed against a co-employee as a case
analogous to serious misconduct, for which penalty of dismissal from service may
be meted out to the erring employee. (Cosmos Bottling Corp. v. Fermin, G.R. No.
193676/194303 [2012]). Similarly, Joses offense perpetrated against his
co-employees, Erica and Paolo, can be considered as a case analogous to serious
misconduct.

Article 282 of the Labor Code provides that an employer may terminate an (B) Assuming this time that Magna dismissed Jose from employment for
employment for any serious misconduct or willful disobedience by the employee of cause and you are the lawyer of Jose, how would you argue the position
the lawful orders of his employer or his representatives in connection with his that Jose's dismissal was illegal? (2013 Bar Questions)
work.

SUGGESTED ANSWER:

Misconduct involves the transgression of some established and definite rule of

action, forbidden act, a dereliction of duty, willful in character, and implies
The offense committed by Jose did not relate to the performance of his duties.
wrongful intent and not mere error in judgment. For misconduct to be serious and
therefore a valid ground for dismissal, it must be:

For misconduct or improper behavior to be a just cause for dismissal, it (a) must be
serious; (b) must relate to the performance of the employees duties; and (c) must
1. of grave and aggravated character and not merely trivial or unimportant
2017 LABOR LAW REVIEW | FINALS
show that the employee has become unfit to continue working for the employer.
On the basis of the forgoing guidelines, it can be concluded that Paolo was not
guilty of serious misconduct: Paolo was not performing official work at the time of
the incident. (Lagrosas v. Bristol Myers Squibb, G.R. No. 168637/170684 [2008])
Additionally, there was no compliance with the rudimentary requirements of due
process.
6.) Q: Luisa Court is a popular chain of motels. It employs over 30 chambermaids
who, among others, help clean and maintain the rooms. These chambermaids are
part of the union rank-and-file employees which has an existing collective
bargaining agreement (CBA) with the company. While the CBA was in force, Luisa
Court decided to abolish the position of chambermaids and outsource the
cleaning of the rooms to Malinis Janitorial Services, a bona fide independent
contractor which has invested in substantial equipment and sufficient manpower.
The chambermaids filed a case of illegal dismissal against Luisa Court. In
response, the company argued that the decision to outsource resulted from the
new managements directive to streamline operations and save on costs. If you
were the Labor Arbiter assigned to the case, how would you decide? (2014 Bar
Question)
SUGGESTED ANSWER:
I will decide in favor of Luisa Court, provided that all the requisites for a
valid retrenchment under the Labor Code are satisfied. It is management
prerogative to farm out any of its activities (BPI Employees Union-Davao City-FUBU
(BPIEU-Davao City-FUBU) v. Bank of the Philippine Islands, et al., G.R. No. 174912,
July 23, 2013).
SUGGESTED ALTERNATIVE ANSWER:
I will decide in favor of the chambermaids. Article 248 (c) of the Labor Code
considers as unfair labor practice on the part of Luisa Court its contradicting out
the services or functions being performed by union members. Luisa Court's
abolition and act of outsourcing the chambermaids' position are clearly acts of
illegal dismissal.
7.) Q: Lito was anticipating the bonus he would receive for 2013. Aside from the
13th month pay, the company has been awarding him and his other co-employees
a two to three months bonus for the last 10 years. However, because of poor
over-all sales performance for the year, the company unilaterally decided to pay
only a one month bonus in 2013. Is Litos employer legally allowed to reduce the
bonus? (2014 Bar Question)
SUGGESTED ANSWER:
Yes. A bonus is an act of generosity granted by an enlightened employer
to spur the employee to greater efforts for the success of the business and
realization of bigger profits. The granting of a bonus is a management prerogative,
something given in addition to what is ordinarily received by or strictly due the
recipient. Thus, a bonus is not a demandable and enforceable obligation, except
when it is made part of the wage, salary or compensation of the employee. It
may, therefore, be withdrawn, unless they have been made a part of the wage or
salary or compensation of the employees, a matter which is not in the facts of the
case (American Wire and Cable Daily Rated Employees Union v. American Wire and
Cable Co., Inc. and the Court of Appeals, G.R. No. 155059, April 29, 2005).
2017 LABOR LAW REVIEW | FINALS
SUGGESTED ALTERNATIVE ANSWER:
No. Having been enjoyed for the last 10 years, the granting of the bonus
has ripened into a company practice or policy which can no longer be peremptorily
withdrawn. Art. 100 of the Labor Code prohibits the diminution or elimination by
the employer of the employees' existing benefits.
8.) Q: Luisa is an unwed mother with 3 children from different fathers. In 2004,
she became a member of the Social Security System (SSS). That same year, she
suffered a miscarriage of a baby out of wedlock from the father of her third child.
She wants to claim maternity benefits under the SSS Act. Is she entitled to claim?
(2015 Bar Question)
SUGGESTED ANSWER:
Yes.
Provided Luisa has reported to her employer her pregnancy and date of
expected delivery and paid at least three monthly contributions during the
12-month period immediately preceding her miscarriage then she is entitled to
maternity benefits up to four deliveries. As to the fact that she got pregnant
outside wedlock, as in her past three pregnancies, this will not bar her claim
because the SSS is non-discriminatory.
9.) Q: Philippine Electric Company is engaged in electric power generation and
distribution. It is a unionized company with Kilusang Makatao as the union
representing its rank-and-file employees. During the negotiations for their
expired collective bargaining agreement (CBA), the parties duly served their
proposals and counter-proposals on one another. The parties, however, failed to
discuss the merits of their proposals and counter-proposals in any formal
negotiation meeting because their talks already bogged down on the negotiation
ground rules, i.e., on the question of how they would conduct their negotiations,
particularly on whether to consider retirement as a negotiable issue.
Because of the continued impasse, the union went on strike. The Secretary of
Labor and Employment immediately assumed jurisdiction over the dispute to
avert widespread electric power interruption in the country. After extensive
discussions and the filing of position papers (before the National Conciliation and
Mediation Board and before the Secretary himself) on the validity of the union's
strike and on the wage and other economic issues (including the retirement
issue), the DOLE Secretary ruled on the validity of the strike and on the disputed
CBA issues, and ordered the parties to execute a CBA based on his rulings.
Did the Secretary of Labor exceed his jurisdiction when he proceeded to rule on
the parties' CBA positions even though the parties did not fully negotiate on their
own? (2013 Bar Questions)
SUGGESTED ANSWER:
No. The power of the Secretary of Labor under Article 263(g) is plenary. He can rule
on all issues, questions or controversies arising from the labor dispute, including
the legality of the strike, even those over which the Labor Arbiter has exclusive
jurisdiction. (Bagong Pagkakaisa ng mga Manggagawa sa Triumph International v.
Secretary, G.R. Nos. 167401 and 167407, July 5, 2010)
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No. Liwanag Corporation cannot outrightly declare the defiant strikers to

10.) Q: Liwanag Corporation is engaged in the power generation business. A have lost their employment status. (A)s in other termination cases, the strikers
stalemate was reached during the collective bargaining negotiations between its are entitled to due process protection under Article 277 (b) of the Labor Code.
management and the union. After following all the requisites provided by law,
the union decided to stage a strike. The management sought the assistance of the Nothing in Article 264 of the Code authorizes immediate dismissal of those who
Secretary of Labor and Employment, who assumed jurisdiction over the strike
and issued a return-to-work order. The union defied the latter and continued the commit illegal acts during a strike (Stanford Marketing Corp. v. Julian, 423 SCRA 633
strike. Without providing any notice, Liwanag Corporation declared everyone (2004); Suico v. NLRC, 513 SCRA 325 [2007]).
who participated in the strike as having lost their employment. (2014 Bar
Question)

(A) Was Liwanag Corporations action valid?

SUGGESTED ANSWER:

Yes. A strike that is undertaken despite the issuance by the Secretary of

Labor of an assumption or certification order becomes an illegal act committed in
the course of a strike. It rendered the strike illegal. The Union officers and
members, as a result, are deemed to have lost their employment status for having
knowingly participated in an illegal act (Union of Filipro Employees v. Nestle
Philippines, Inc., 192 SCRA 369 [1993] ) . Such kind of dismissal under Article 264
can immediately be resorted to as an exercise of management prerogative (Biflex v.
Filflex Industrial, 511 SCRA 247 [2006]).

SUGGESTED ALTERNATIVE ANSWER: